The expiry of Bush-era tax cuts at year end, as originally legislated, could knock back the already anemic U.S. recovery. Deficit hawks reckon that’s an acceptable risk, saying America just can’t afford to extend them. But that viewpoint assumes some belief in Wagner’s Law, which posits ever-higher public spending — a bit of dogma in need of debunking.

The remainder of the Obama presidency may hinge on whether the White House can reach a grand agreement with Republicans on critical tax and budget issues. The departure of White House chief of staff Rahm Emanuel to run for Chicago mayor makes that a bit harder. As befits a former investment banker, he understood how to close a deal. Negotiating skills are still in high demand at the White House.